JBB BUILDERS (01903.HK) announcement, on 17 March 2022, JBB Kimlun, a subsidiary of the Company, entered into the Astaka Padu-JBB Kimlun settlement Agreement with Astaka Padu, whereby JBB Kimlun conditionally agreed to settle the total amount due to JBB Kimlun and Astaka Padu in the following manner in accordance with the MBJB General contractor Agreement, which is approximately 24.8 million ringgit outstanding.
Upon the transfer of the counter property under the AstakaPadu Group-JBB Kimlun countersale Agreement, the Agreement will settle the AstakaPadu-JBB Kimlun countersale settlement amount, and AstakaPadu will fulfill the remaining payment obligations under the AstakaPadu-JBB Kimlun settlement Agreement, namely the AstakaPadu-JBB Kimlun cash settlement amount, and the outstanding contract amount will be deemed to have been fully and finally settled by AstakaPadu, and JBB Kimlun shall not make any further claim against AstakaPadu in respect of the MBJB General contractor Agreement.
On April 14, 2022, JBB Kimlun entered into the JBB Kimlun-Kimlun settlement Agreement, pursuant to which JBB Kimlun conditionally agreed to settle the total outstanding subcontract amount due to Kimlun and JBB Kimlun in the following manner in accordance with the MBJB subcontractor Agreement.
Upon the transfer of the counter-sale property by the Astaka Padu Group and the cash settlement amount paid by JBB Kimlun to JBB Kimlun-Kimlun, the outstanding subcontract amount (i.e. the JBB Kimlun-Kimlun property settlement amount and the JBB KimlunKimlun cash settlement amount) will be deemed to have been fully and finally settled by JBB Kimlun and Kimlun shall not make any further claim against JBB Kimlun of any nature in respect of the MBJB subcontractor Agreement.
Through the AstakaPadu-JBB Kimlun transaction, the Group will (I) transfer the countervailing property settlement AstakaPadu-JBB Kimlun settlement amount, immediately no longer face some of the credit risk associated with the outstanding contract amount; and (ii) pay cash in an orderly manner through AstakaPadu and no longer face other credit risks related to the outstanding contract amount, which will improve the Group's financial performance in the future.
Through the JBB Kimlun-Kimlun transaction, the Group will settle the outstanding trade payables with Kimlun, which is conducive to the maintenance of the Group's business relationship with Kimlun. The outstanding subcontract payment arrangements also give the Group the flexibility to settle outstanding trade payables, which helps the Group to maintain a sound cash position.